Miller v. HCP & Co.

2018 WL 656378 (2018)

From our private database of 46,300+ case briefs, written and edited by humans—never with AI.

Miller v. HCP & Co.

Delaware Court of Chancery
2018 WL 656378 (2018)

SC
Play video

Facts

Christopher Miller (plaintiff) founded Trumpet Search, LLC. HCP & Company (defendant) owned the vast majority of Trumpet’s Class D and Class E membership units. Under Trumpet’s operating agreement, Class E units were first in line for payment if Trumpet were sold, due a 200-percent return on their investment. Class D units were second in line for a 200-percent return payment. The effect of this provision was that in the event of a sale, HCP would reap most of the first $30 million in sale proceeds. The only requirement with respect to a sale was that any sale must be to a third party. HCP controlled four of Trumpet’s seven board seats, and any sale could be approved with a majority vote of the board. Also, in the operating agreement, Trumpet’s members and board members waived all fiduciary duties. Approximately seven months after the agreement was signed, the HCP board members stated that they planned to sell Trumpet to MTS Health Partners, L.P. for $31 million. HCP gave non-HCP board members five days to find an alternative offer. The non-HCP board members found another offer for $36 million, prompting MTS to increase its offer to $41 million. They also obtained a letter of interest valuating Trumpet at $50–$60 million. The board ultimately approved a sale to MTS at just under $43 million. Non-Class D and -Class E members received almost nothing in the transaction. Miller sued HCP, seeking a court order that the implied covenant of good faith and fair dealing required the Trumpet board to conduct an auction sale of Trumpet in order to maximize value for all Trumpet members. HCP moved to dismiss the complaint.

Rule of Law

Issue

Holding and Reasoning (Glasscock, J.)

What to do next…

  1. Unlock this case brief with a free (no-commitment) trial membership of Quimbee.

    You’ll be in good company: Quimbee is one of the most widely used and trusted sites for law students, serving more than 802,000 law students since 2011. Some law schools—such as Yale, Berkeley, and Northwestern—even subscribe directly to Quimbee for all their law students.

    Unlock this case briefRead our student testimonials
  2. Learn more about Quimbee’s unique (and proven) approach to achieving great grades at law school.

    Quimbee is a company hell-bent on one thing: helping you get an “A” in every course you take in law school, so you can graduate at the top of your class and get a high-paying law job. We’re not just a study aid for law students; we’re the study aid for law students.

    Learn about our approachRead more about Quimbee

Here's why 802,000 law students have relied on our case briefs:

  • Written by law professors and practitioners, not other law students. 46,300 briefs, keyed to 988 casebooks. Top-notch customer support.
  • The right amount of information, includes the facts, issues, rule of law, holding and reasoning, and any concurrences and dissents.
  • Access in your classes, works on your mobile and tablet. Massive library of related video lessons and high quality multiple-choice questions.
  • Easy to use, uniform format for every case brief. Written in plain English, not in legalese. Our briefs summarize and simplify; they don’t just repeat the court’s language.

Access this case brief for FREE

With a 7-day free trial membership
Here's why 802,000 law students have relied on our case briefs:
  • Reliable - written by law professors and practitioners, not other law students
  • The right length and amount of information - includes the facts, issue, rule of law, holding and reasoning, and any concurrences and dissents
  • Access in your class - works on your mobile and tablet
  • 46,300 briefs - keyed to 988 casebooks
  • Uniform format for every case brief
  • Written in plain English - not in legalese and not just repeating the court's language
  • Massive library of related video lessons - and practice questions
  • Top-notch customer support

Access this case brief for FREE

With a 7-day free trial membership